Hutton’s plans mean savage cuts – Fight the pensions robbery
Martin Powell-Davies, a Socialist Party member and executive committee member of the National Union of Teachers (NUT), explains what Hutton’s proposals on pensions will mean and why millions of public sector workers need to urgently ballot for strike action against this major attack. Lord Hutton’s second report into public sector pensions has confirmed the attacks that we have been expecting.
He has recommended:
a) An end to final salary pension schemes – to be replaced by ‘career average’ schemes in order to cut the value of pensions.
b) Retiring older – the ‘normal pension age’ would rise first to 65 for all but increase further to 68 in future to track the rising state pension age.
This comes on top of the attacks we already know about, particularly:
c) Paying more – with the government wanting to increase pension contributions by 50%.
Lord Hutton’s interview on Radio 4 this morning contained a series of distortions designed to confuse and divide opposition – we must not be fooled.
First, he claims that ‘there is no alternative’, that we’re all living longer and so we have to work longer to pay for it. The financial statistics don’t back this up.
As the NUT press release has stated: “The National Audit Office has confirmed that public sector pension costs are falling as expected due to the reforms already in place.
“Pensions have already been cut by changing their link from RPI to CPI inflation. As a result of this, next month’s pension increase will be 1.5% less than it should have been”.
Second, Hutton claims that public-sector workers can’t expect to carry on with final-salary pensions when most private-sector workers aren’t getting them.
But why should we allow ourselves to be ripped off in the same way that many private companies are ripping off their employees? The best way to defend all workers – in both the public and private sectors – is for someone to put up a fight, and we are going to!
Lastly, as well as trying to divide public sector workers from private sector colleagues, Hutton wants to divide classroom teachers from promoted colleagues by claiming that ‘career-average’ schemes will be ‘fairer’ to those lower down the scale. But what he intends will be unfair to all of us.
These schemes will be constructed to give us less pension even though we’ll be paying in more. There’s nothing ‘fair’ about Hutton’s proposals – they are just another part of this government’s agenda of cuts and privatisation.
Hutton did have to admit that there would have to be consultation and changes to legislation to bring in these changes. That means we have a window – although it might be a short one – to organise the united action needed to stop these attacks.
Hutton’s report must be met with a quick response – coordinated ballots across the public sector for strike action to defeat this pensions robbery.
Hutton’s report is an example of distorted propaganda on behalf of this millionaires government. *As Unison have rightly pointed out:
“The local government and NHS pension schemes were renegotiated in 2006 to make them sustainable and affordable.
Both schemes are cash rich – more is going in than coming out.
Last year, the NHS scheme received £2billion more in contributions than it paid out and this money went straight to the Treasury.
The average pension in public service pension schemes is very low, for example in local government, the average is just over £4,000, falling to £2,800 for women.
If these people didn’t save for their retirement, they would have to rely on *means-tested benefits paid for by the taxpayer.
Pensioners are already being hit with the move from RPI to CPI to calculate annual inflation increases – this will reduce their value by 15%.
PCS general secretary Mark Serwotka said:
“Even Hutton’s own interim report in October showed that the cost of public sector pensions is falling.”
“What fatally undermines Hutton’s argument, though, is George Osborne explicitly telling parliament that ‘from the perspective of filling the hole in the public finances, we will seek changes that deliver an additional £1.8bn of savings per year in the cost of public service pensions by 2014-15’.
“So public sector pensions are being cut not because they are unaffordable or unsustainable but because there’s a hole in the public finances. That hole was caused by the banking crisis and the recession that resulted. It was not caused by public spending, public sector workers or their pensions.”
